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Kennedy backs greater tax powers for Scotland

CHARLES KENNEDY, the Liberal Democrat leader, has backed a referendum on greater tax powers for the Scottish parliament to be staged after the next Holyrood election in 2007.

In a move which will infuriate Labour and lead to increased tension within the Scottish executive coalition, Kennedy said MSPs should have more control over taxation and insisted a referendum would give the policy greater authority.

The Lib Dems have called for a range of new tax powers for the Scottish parliament, including control over inheritance and capital gains taxes, alcohol and tobacco duties and environmental levies.

The Lib Dems will be urged to back full fiscal freedom at their Scottish conference in Dundee next week. A motion calls for the Scottish parliament to be “responsible for setting and collection of all national taxation within Scotland”. It also calls for legislation to ensure financial independence by 2007. But the party’s policy committee